4  KEGENT   HAMILTON  S   COMMUNICATION. 

This  statement  was  probably  intended  to  lead  the  Legisla- 
ture to  infer  that  the  four  blocks  cost  but  $84,000;  and  that 
$65,000  had  been  gained  by  the  speculation,  when  in  fact  tjlese 
four  blocks  cost,  years  ago,  $163,345  55,  which  was  $13,345  55 
more  than  the  Regents  claim  them  now  to  be  worth,  afthough 
— "  in  the  heart  of  the  growing  city  of  Oakland." 

But  there  are  other  causes  of  complaint.  The  outside  prop- 
erty valued  at  about  $30,000,  adjoining  the  University  site  at 
Berkeley,  which  had  been  obtained  from  the  College  of  Cali- 
fornia, transferred  to  Mrs.  Brayton  in  part  payment  for  blocks 
Nos.  2  and  3,  was  worth  to  the  Agricultural  Department  of  the 
University  for  experimental  purposes,  at  least  $200,000,  which 
is  probably  not  far  from  its  present  commercial  value.  This 
indicates  that  the  Brayton  job  has  cost  the  institution  about 
$175,000,  and  robbed  the  Experimental  Farm  of  nearly  if  not 
quite  two  hundred  of  ground  essential  in  making  up  the  neces- 
sary varieties  of  soil  and  location.  The  Regents  estimate  the 
remaining  two  hundred  acres  directly  adjoining,  although  val- 
uable and  sheltered  for  horticulture,  at  one  thousand  dollars 
per  acre,  (see  page  forty-sixth,  same  statement),  while  the 
water  rights  parted  with  are  practically  inestimable. 


To  MESSRS.  MARTIN.  Moss  &  HALLIDIE, 

FINANCE  COMMITTEE, 
OF  THE  BOARD  OF  REGENTS  OF  THE  UNIVERSITY  OF  CALIFORNIA  : 

Gentlemen— ^Detailed  by  you  to  examine  the  records  in  the  offices 
of  the  Surveyor  General  and  Controller,  as  far  as  they  relate  to  the 
vsale  of  the  seventy-two  sections  of  Seminary  Lands  and  the  ten  sec- 
tions of  Public  Building  Lands  and  the  disposition  of  the  proceeds 
arising  therefrom,  and  all  other  accounts  relating  to  the  income  of  the 
University,  after  a  careful  examination,  the  following  report  is  respect- 
fully submitted  : 

The  Land  Register  in  the  Surveyor  General's  office,  shows  that  the 
sales  of  the  Seminary  and  Public  Building  Lands  commenced  in  the 
years  1858  and  1859,  giving  the  number  of  acres  sold,  the  date  and 
amount  of  the  first  payment  of  the  twenty  per  cent,  or  full  payment 
of  principal  and  the  first  year's  interest  paid  in  advance,  also  the 
dates  arid  payments  of  the  balance  of  eighty  per  cent.  From  this 
Register  the  following  statement  is  made  to  date  of  October  16,  1876. 

SEMINARY  LAND  SALES. 

42,676.73  Acres,  Payment  in  full  @  $1.25  per  Acre $53,345.91 

1,520  « '       20  per  cent,  of  principal  paid 380.00 

1,760  "       20         '•  "  "     declared  forfeited, ..         440.00 


45,956.73       "  Total  Amount  received $54, 165. 91 

Less  Commission  paid  County  Treasurer  of  2^  per  cent 1,354.15 


Net  proceeds  due  State  Treasury §52,811.76 


PUBLIC  BUILDING  LAND  SALES. 

5,281.58  Acres,  Payment  in  full  at  $1.25  per  acre $6,601.97 

640  "       20  per  cent,  of  principal  paid 160.00 


5,921.58  Total  amount  received , $6,761.97 

Less  County  Treasurer's  Commission  of  2£  per  cent. 169.05 


Net  proceeds  due  State  Treasury $6,592.92 


As  some  loss  has  been  sustained  by  the  defalcations  of  County 
Treasurers,  the  pro  rata  of  loss  to  Seminary  and  Public  Building 
Funds,  probably  may  aggregate  of  principal  and  interest  $2000. 

The  Register  also  gives  the  dates  o£  payments  of  the  Annual  inter- 
est, but  not  the  amounts  paid  except  in  a  few  instances — from  which 
the  following  interest  statement  is  made,  the  rate  of  interest  was  ten 
per  cent,  per  annum,  and  in  this  statement  is  calculated  from  the  date 
of  the  first  payment  of  the  twenty  per  cent,  of  principal. 

INTEREST  ON  SEMINARY  LAND  PRINCIPAL. 

On  42,676.73  Acres,  Balance  of   eighty  per  cent $29,726.29 

"      1,520  "  "  "         "       "     1,688.00 

"      1,760  "  ;'         "  .    "    650.00 


Total  Interest $32,070.29 

Less  County  Treasurer's  Commission  of  2i  per  cent 801.76 


Net  Interest  due  State  Treasury $31,268.53 

INTEREST  ON  PUBLIC  BUILDING  LAND  PRINCIPAL. 

On  5,281.51  Acres,  Balance  of  eighty  per  cent $2,511.10 

"      640  "  "  ''         "       "   .  186.05 


Total  Interest $  2,697.15 

Less  County  Treasurer's  Commission  of  2  A-  per  cent 67. 43 


Net  Interest  due  State  Treasury $  2,629.72 

Most  of  the  locations  on  which  only  twenty  per  cent,  of  the  princi- 
pal has  been  paid,  should  have  been  declared  forfeited,  as  the  interest 
thereon  has  not  been  paid  for  several  years,  in  some  cases  the  last 
payments  of  annual  interest  were  made  for  the  years  of  1862  and 
1864.  Although  delinquent  lists  have  been  made  out  and  sent  to 
District  Attorneys,  no  action  seems  to  have  been  taken.  Thus  over 
1,500  acres  are  withheld  from  the  Land  Department  of  the  University 
for  re-entry  and  sale  and  to-day  these  lands  stand  upon  the  Register 
in  the  names  of  the  original  applicants.  It  will  require  action  on  the 
part  of  the  Regents  to  secure  from  the  several  District  Attorneys  the 
faithful  discharge  of  their  duties  in  the  energetic  prosecution  of  all 
delinquent  applicants. 

The  Journal  and  Ledger  of  the  Controller's  Office,  show  that  the 
sales  of  the  Public  Building  Lands  and  interest  arising  therefrom 


were  credited  to  the  School  Fund,  prior  to  November  21,  1861.  Under 
date  of  May  16th,  1862,  the  first  credit  is  given  and  account  opened 
with  the  Public  Building  Fund,  and  this  account  is  charged  with 
81,068.04  paid  mileage  to  the  Directors  of  the  Agricultural  and  Me- 
chanics Art  College.  On  the  14th  of  April,  1868,  this  account  is 
closed  by  carrying  the  balance  to  the  credit  of  the  University  Fund 
Account  and  thereafter  the  principal  and  interest  are  credited  to  this 
Fund,  making  a  total  credit  from  April  21,  1860,  of  Public  Building 
Land  principal  of  $5,451.91  and  of  interest  $2,104.99. 

SEMINARY  LANDS. 

The  first  credit  in  the  Controller's  books  from  sales  of  Seminary 
Lands,  is  under  date  of  July  19th,  1859,  and  to  November  20th,  1861, 
are  passed  to  the  credit  of  the  School  Fund.  Then  a  Seminary  Land 
Fund  Account  is  opened  by  the  first  credit  under  date  of  May  16th, 
1862,  and  continued  to  May  14th,  1868,  and  then  closed  by  carrying 
the  balance  to  the  credit  of  the  University  Fund.  Up  to  date  of  May 
14th,  1868,  the  total  sales  of  seminary  lands  amounted  to  $12*621.84 
and  $13,586.20  had  been  received  for  interest.  The  debits  of  the 
accounts  are,  Investment  in  Soldier  Relief  Bonds  (of  par  value  of  $22' 
500  bearing  seven  per  cent,  per  annum  interest)  at  a  cost  of  $19,594.75. 
Mileage  paid  Directors  of  the  Agricultural  and  Mechanics'  Arts  College 
$1357.60  (this  with  the  amount  of  $1,068.14,  charged  to  Public  Build- 
ing Land  Fund,  making  a  total  of  $2,425.64  expended  by  the  Direc- 
tors in  their  search  for  a  College  Site)  and  the  amount  of  $504  re- 
turned on  cancellation  of  a  certificate  of  Purchase,  making  a  total 
debit  of  $21,456.35,  previous  to  being  merged  into  the  University 
Fund  Account.  The  total  credits  from  July  19,  1859,  to  June  23. 
1876,  amount  to,  of  Seminary  Land  Principal  $44,675.53,  and  of 
interest  $21,701.84. 

For  a  more  comprehensive  understanding  of  the  relations  between 
the  statements  made  from  the  State  Surveyor  General's  Register, 
(which  may  be  considered  the  book  of  original  entry,)  and  the  books 
kept  in  the  Controller's  Office,  that  solely  give  the  debits  a.nd  credits 
of  all  University  Accounts,  the  following  is  submitted. 


COMPARATIVE    RECAPITULATIONS. 

SEMINARY  LAND  PRINCIPAL. 

Total  sales  from  Surveyor-General's  Register  45,956.73  acres $52,811.76 

Total  credit  of  sales  as  per  Controller's  Books 44,675.53 

Amount  not  credited  to  University  account 8, 136. 23 

SEMINARY  LAND  INTEREST. 

Total  Interest  as  per  Surveyor-General's  Register * 831,268.53 

Total  credit  of  interest  as  per  Controller's  Books 21,701.84 

Amount  not  credited  to  University  account $  9,566. 69 

PUBLIC  BUILDING  LAND  PRINCIPAL. 

Total  sales  from  Surveyor  General's  Register  5,921,58  acres $6,592.92 

Total  Credit  of  sale  as  per  Controller's  Books 5,451.91 

Amount  not  credited  to  University  account $1,141.01 

PUBLIC  BUILDING  LAND  INTEREST. 

Total  Interest  as  per  Surveyor  General's  Register. $2,629.72 

Total  credit  of  Interest  as  per  Controller's  Books/ 2,104.99 

Amount  not  credited  to  University  account $  524. 73 

RECAPITULATION  OF  TOTALS. 

Amount  due  from  Seminary  Land  Principal $8,136.23 

"      "  "  "      Interest 9,566.69 

"       "     Public  Building  Land  Principal 1,141.01 

"       "  "  "  "     Interest..  524.73 


Total  due  University $19,368.66 

Thus  it  appears  that  the  University  is  entitled  to  a  credit  of  $19, 
368.66,  less  the  losses  sustained  by  defalcations  of  County  Treasurer's. 

This  deficiency  of  $19,368.66,  as  shown  by  the  comparison  of  the 
books  of  the  Surveyor  General  and  Controller,  is  probably  mostly  caiised 
by  erroneously  crediting  these  funds  to  the  School  Fund.  In  the  Sur- 
veyor General's  report  for  the  year  1862,  14th  session,  he  gives  the  total 
of  principal  and  interest  of  the  Seminary  Fund,  as  reported  to  the 
State  Register  at  $25,515.09,  while  the  Controller's  books  show  a  total 
amount  of  principal  and  interest  of  only  $6,534.97.  This  discrepancy 
of  $18,980.12  he  accounts  for  by  saying  "that  the  County  Treasurers 
will  not  learn  to  distinguish  between  these  lands  and  School  Lands^ 
and  thus  pay  it  unto  the  School  Fund." 


Under  the  present  organization,  these  errors  cannot  easily  occur  as 
the  reports  of  County  Treasurers  before  accepted  by  the  Controller 
must  be  revised  in  the  Surveyor  General's  Office,  and  certified  to  be 
correct. 

THE  UNIVERSITY  FUND. 

This  account  is  opened  on  the  Books  of  the  Controller,  July  6th, 
1868,  by  a  transfer  of  Coin,  under  Act  of  March  26,  1868,  from  the 
School  Fund,  of  $44,064.00,  and  thereafter  receives  the  credits  of  the 
proceeds  of  sales  of  Seminary  and  Public  Building  lands  and  interest 
thereon,  the  interest  on  Seminary  Bonds,  the  interest  on  the  $35,000 
of  Bonds  transfered  under  act  of  March  26,  1868,  the  $200,000  ap- 
propriated from  sale  of  Tide  Lands  under  act  of  March  30th,  1868, 
the  interest  on  Bonds  purchased  from  proceeds  of  sale  of  Tide  Lands 
under  act  of  April  2d,  1870,  and  a  transfer  from  the  General  Fund 
of  $7,312.18,  to  meet  in  part  the  payment  of  monthly  deficiencies 
provided  for  by  act  of  March  26th,  1872,  Debeting  the  University 
Fund  Account  with  nine  monthly  deficiencies  aggregating  $45, 557. 99, 
(paying  the  balance  of  monthly  deficiency  from  the  General  Fund  to 
the  amount  of  $71,780.80,  which  was  charged  to  an  account  entitled 
"  Support  of  State  University.") 

Thus  the  plan  adopted  by  the  Hon.  J.  J  Green,  Controller, 
was  to  charge  to  the  University  Fund,  the  monthly  deficiency  (  pro- 
vided for  by  Act  of  March  26,  1872)  whenever  a  balance  could  be 
•  found  to  pay  them  and  when  the  fund  was  exhausted  to  draw  upon 
the  General  Fund.  By  this  peculiar  system  of  accounts,  he  charged 
the  monthly  deficiency  to  two  accounts.  Instead  of  sending  to  the  Treas- 
urer of  the  University  the  income  accruing  from  time  to  time  to  the 
University  Fund,  from  principal  and  interest  collected  on  balance  of 
principal  due  for  Seminary  and  Public  Building  lands,  and  interest  due 
on  bonds  and  thus  enable  the  Secretary  of  the  University  to  deduct 
these  amounts  of  income,  as  received,  from  his  monthly  disbursements, 
as  required  by  the  act  of  March  26,  1872,  that  reads  "to  transmit  to 
the  Controller  of  State  a  sworn  statement  of  the  receipts  from  ALL 
SOURCES  OF  INCOME  during  the  month  ending  on  that  day."  He  consti- 
tuted himself  the  Book-keeper  of  your  Treasurer  and  by  his  original 
system  of  accounting,  neither  the  Treasurer  or  Secretary  of  the  Uni- 
versity knew  of  the  sources  of  income  accruing  in  the  University 
Fund.  (See  letters  of  Attorney  General,  Finance  Committee  and 
Andrew  J.  Moulder,  in  Appendix.  A  copy  in  the  letter  book  of  your 


8 

The  University  lias  also  lost  $5,475,  of  interest  that  would  have 
accrued  had  the  full  amount  of  Bonds  been  purchased  from  the  pro- 
ceeds of  the  sale  of  Tide  Lands,  as  provided  for  by  Act  of  April  2d, 
1870,  to  yield  an  annual  income  of  $50,000.  The  last  investment  in 
these  Bonds  was  made  July  7th,  1874,  of  $168,500,  this  amount  with 
former  investments  producing  Bonds  of  the  par  value  $750,000. 

The  following  statement  gives  the  semi-annual  interest  credits  as 
shown  by  the  books  of  the  Controller. 

1872,  July  12,    Interest  on  $  65,000  Bonds  for  six  months .$  1,950.00 

1873,  January  3,        "  "  200,000  "  "  "  "  ; 6,675.00 

July  11,           "  "  400,000  "  "  "  '•  10,()75.00 

1874,  January  8,       "  •'  400,000  "  "  "  "  12,675.00 

July,  8,           "  "  581,500  "  "  "  "  15,120.00 

1875,  February  16,  "  "  750,000  "  "  "  "  23,175.00 

July,  2,          "  "  750,000  "  ':  "  "  23,175.00 

1876,  January  2,      "  "  750,000  "  "  "  "  23,175.00 

July  6,            "  "  750,000  "  "  "  "  23,175,00 

$139,795.00 

Thus  instead  of  complying  with  the  Act  of  April.  2d,  1870,  the  Con- 
troller only  invested  in  Bonds  an  amount  sufficient  to  produce  an ,  an- 
nual interest  or  income  of  $46,350.00,  hence  the  loss  to  the  Univer- 
sity of  one  and  one-half  years  interest  of  $3,650,  viz.  $5,472.  Yet  the 
Hon.  J.  J.  Green,  Controller,  in  his  Biennial  Report  of  1873,  and 
1875,  says : 

The  Act  of  April  2,  1870,  which  requires  that  so  much  of  the  net  pro- 
ceeds from  the  sales  of  Tide  Lands,  be  invested  in  Bonds  for  the  bene- 
fit of  the  State  University,  as  will  yield  an  annual  income  of  $50,000, 
has  now  beer  fully  complied  with. 

State  Capital  Bonds  of  1872,  7  per  cent $135,000.00 

State  Bonds  of  1873,  6  per  cent 676,500.00 

Total $811,500.00 

These  bonds  yield  an  annual  income  of  $50,040. 

Unfortunately  for  the  Treasury  of  the  University  and  the  correctness 
of  the  Controller's  Biennial  Report,  the  certified  statement  from  the 
present  Controller  and  Treasurer  herewith  ban  led  you,  show  the  fol- 
lowing Statement  to  be  the  correct  account  of  the  par  value  of 
Bonds  purchased  from  the  proceeds  of  the  sale  of  Tide  Lands. 


9 

State  Capital  Bonds  of  1872,  7  per  cent §135,000.00 

Civil  Debt  Bonds  of  1873,  6  per  cent , 615,000.00 


Total $750,000.00 

Producing  an  annual  income  of  $46,350.00,  the  balance  of  $61,500, 
in  Bonds  required  to  make  up  the  $811,500  in  Bonds,  claimed  by  the 
Controller  to  have  been  purchased  from  the  proceeds  of  sales  of  Tidfe 
Lands,  are  the  Seminary  Bonds  of  $22,500,  and  the  $35,000  in  Bonds 
transferred  to  University  Fund,  July  6,  1868,  and  refunded  March  1, 
1873,  producing  $61,500  in  Civil  Debt  Bonds,  as  shown  by  the  state- 
ments of  the  present  Controller  and  Treasurer,  Of  the  Seminary  Land 
Principal,  the  only  lawful  investment,  was  the  $19,594.75,  in  Soldier 
Relief  Bonds  of  the  par  value  of  $22,500,  this  amount  added  to  the 
s."), .VJ9.82,  illegally  used  by  Controller  Green  to  pay  monthly  deficiency, 
and  also  an  estimated  amount  of  $1,000,  lost  by  defalcation  of  County 
Treasurer,  make  a  total  of  $26,194.57,  which  deducted  from  the  total 
sales  as  shown  by  the  books  of  the  Controller,  of  $44,675,53,  leaves  a 
balance  of  $18,480.96,  that  the  Regents  have  used  for  the  payment  of 
current  expenses,  not  having  been  informed  by  the  Controller  of  the 
sources  from  which  this  sum  was  obtained.  From  lack  of  detailed 
statements  on  the  part  of  the  Controller,  the  Treasurer  and  Secretary 
of  the  University  have  not  been  able  to  keep  correctly  the  State  En- 
dowment Interest  account  (derived  from  the  Tide  Land  investment,) 
and  the  State  appropriation  accounts.  Thus  onthe  books  of  the  Regents, 
the  amounts  received  from  the  State  Treasury,  for  Stat#  Endowment 
Interest,  aggregates  $134,648.37,  whereas  the  correct  amount  is 
$139,795.00,  making  a  difference  of  $5,146.63.  The  State  Appro- 
priation Account  on  the  books  of  the  Regents  gives  a  total  of 
$194,826.61,  made  up  as  follows,  viz  : 

Payment  of  monthly  deficiency §110,026. 61 

Two  year's  appropriation,  Act  of  1874 84,800.00 

Total  as  per  Regent's  Ledger $194,826.61 

The  correct  amount  will  be  obtained  by  deducting  from  the  above, 
*1 10,026.61,  $38,245.80,  the  amount  of  monthly  deficiency  charged 
to  and  paid  from  the  University  Fund  leaving  a  balance  of  $71,780.80, 
received  from  the  State  appropriation  of  March  26th,  1872,  to  this 
amount  if  added  the  State  appropriation  of  1874,  of  $84,800.00,  the 
total  of  State  appropriations  to  the  University  will  be  $156,580.80. 


10 

In  other  words  the  Regents  give  a  credit  for  $110,026,61,  received 
on  account  of  monthly  deficiency,  when  in  fact  but  $71,780.80,  was 
paid  from  the  appropriation  for  monthly  deficiency,  thus  showing  the 
necessity  of  the  Controller  giving  to  the  Secretary  of  the  Board  of 
Regents,  when  advising  him  of  an  amount  in  the  Treasury  subject  to 
the  order  of  the  Board,  a  detailed  statement  of  the  sources  from  which 
said  amounts  accrued. 

From  the  preceding  statements  the  following  recapitulation  is  given, 
showing  a  total  of  $38,035.52.  To  this  amount  is  to  be  added  the 
unpaid  monthly  deficiency  for  the  month  of  December,  1873,  of 

$4,184.17,  THAT  WAS  AUDITED  BY  THE  STATE  BOARD  OF  EXAMINERS, 
BUT  FOR  WHICH  THE  CONTROLLER  FAILED  TO  ISSUE  HIS  WARRANT. 

RECAPITULATION. 

Bal.  due  on  Seminary  Land  Principal,  per  Surveyor  General's  Reg.  .$  8,  ISO. '23 

Public  Building  Lands,                                      "              "  1,141.01 

"     from  Seminary  Land  Interest,         "                   "              "  9,56(>.(>9 

Public  Building  Land  Int.       "                   "               "  524.73 

Seminary  Land  Principal  used  by  Controller  Green,  subsequent  to 

April  1st,  1872,  to  pay  monthly  deficiency 5,599.82 

Balance  in  University  Fund  prior  to  January  20th,  1872,  used  by 
Controller  Green,  subsequent  to  April  1,  1872,  to  pay  monthly 

deficiency 6,965.04 

Unpaid  Interest  on  $35,000  Bonds - 627. 00 

Loss  of  Interest  from  Tide  Land  Bonds  by  not  investing  an  amount  • 

to  produce  $50,000,  per  annum '5,475.00 

Unpaid  Monthly  deficiency  of  December,   1873 4,184.17 

142,219.69 
Deduct  estimated  loss  by  defalcations  of  County  Treasurers 2,000.00 


140,219.69 

To  the  amount  of  $40,219.69,  is  to  be  added  the  $61,500.00  in 
Bonds,  now  erroneously  included  as  a  part  of  the  Bonds  purchn  S«-M  I 
form  the  proceeds  of  the  sale  of  Tide  Lands,  making  a  grand  total  of 
$1 01 ,71  9.69  due  by  the  State  to  the  University.  For  the  different 
Acts,  Congressional  and  Legislative,  and  resolutions  of  the  Board  of 
Regents  as  well  as  the  financial  statements  from  which  this  report  is 
made,  you  are  referred  to  the  abstract  and  statements  accompanying 
this  report. 

To  the  Gentlemen  in  the  Offices  of  the  Surveyor  General,  State 
Controller  and  Treasurer,  my  cordial  thanks  are  due  for  their  assist- 
ance and  courtesy. 

Very  Respectfully, 

J.  HAM  HARRIS, 

DECEMBER  IST,  1876. 


11 


SAN  FRANCISCO,  February  10th,  1878. 

J.  HAM  HARRIS,  ESQ. 
DEAR  SIR: 

Please  advise  the  Finance  Committee  of  the  amount  of  semi- 
annual interest  which  has  accrued  to  the  University  under  the  Act 
of  April  2d,  1870,  since  the  date  of  your  report,  dated  December  1st, 
1876,  and  which  has  not  been  paid. 

A.  S.  HALLIDIE, 
Chairman  of  Finance  Committee. 


'SAN  FRANCISCO,  February  10th,  1878. 

A.  S.  HALLIDIE,  ESQ.,  CHAIRMAN  OF  FINANCE  COMMITTEE, 
DEAR  SIR: 

In  reply,  would  state  that  the  semi-annual  interest  received  by 
the  Treasurer  of  the  University,  under  Act  of  April  2d,  1870,  due 
011  the  2d  of  January,and  2cl  of  July,  1877,  and  2d  of  January,  1878, 
amounted  to  $23,175.00,  whereas  the  University  was  entitled  to 
receive  a  semi-annual  interest  of  $25,000.00,  under  said  Act,  there- 
fore the  loss  is  the  difference  between  $23,175.00  and  25,000.00,  viz: 
$1,825.00  semi-annually  from  January  2d,  1877,  to  January  2d,  1878. 

Making  the  deficiency  in  interest  of $     5,475,00 

To  which  add  amount  shown  by  my  report  dated  December  1st, 

1876..  .    101,719.69 


Total  amount  due  to  January  2d,   1878 §107,194.69 

Yours  Respectfully, 

J.  HAM  HARRIS. 


10 


11 


APPENDIX. 


OFFICE  OF  THE  ATTORNEY  GENERAL  OF  THE  STATE  OF  CALIFORNIA, 


SACRAMENTO,  April  29th,  1872. 

HON.  JAMES  J.  GREEN,  Controller,  Etc. 

In  answer  to  your  communication,  of  April  24th,  asking  for  a  con- 
struction of  the  law  of  1872,  in  regard  to  the  payment  of  -the  current 
expenses  of  the  University  of  California,  I  am  of  the  opinion  that 
where  the  necessary  expenses  of  the  University  for  any  one  month 
exceeds  the  income,  from  all  sources,  of  that  month,  that  it  is  your 
duty  to  draw  in  favor  of  the  Regents,  a  warrant  for  the  deficiency 
provided  that  the  amount  of  income  and  the  amount  of  the  deficiency, 
do  not  together  exceed  six  thousand  dollars,  and  that  the  amount 
should  be  drawn  on  the  General  Fund. 

The  only  matter  for  you  to  determine  is  the  amount  of  income  from 
all  sources  and  the  necessary  expenses  of  each  month;  if  the  expenses 
are  greater  than  the  income,  the  Regents  are  entitled  to  a  war- 
rant for  the  difference,  reference  being  had  to  the  proviso  above 
mentioned. 

Yo^rs  Respectfully, 

JOHN  L.  LOYE, 

Attorney  General,  Cal. 


12 

SAN  FRANCISCO,  February  10th,  1873. 

To  HON.  J.  J.  GREEN,  Controller  of  State, 
DEAR  SIR  : 

Your  letter  of  the  6th  inst.  to  Andrew.  J.  Moulder,  Sec- 
retary, was  submitted  to  the  Board  of  Regents,  at  their  meeting  held 
on  the  7th  inst,  and  by  the  Board  was  referred  to  the  undersigned 
constituting  the  Finance  Committee. 

We  desire  .to  call  attention  more  particularly  to  the  following  ex- 
tract from  your  letter,  "  There  is  no  money  remaining  on  the  Sem- 
inary or  University  Fund.  This  Fund  is  derived  from  sale  of  lands 
and  interest  on.Bonds,  and  was  considered  by  the  Board  of  Examiners 
and  myself  to  be  one  of  the  sources  of  Revenue  that  must  be  exhausted 
before  your  claim  for  monthly  deficiency  could  be  allowed  from  the 
General  Fund.  The  claims  for  monthly  support  were  therefore  credited 
and  paid  from  this  Fund  until  exhausted,  then  from  General  Fund." 

On  behalt  of  the  Regents  we  must  dissent  from  this  interpreta- 
tion of  the  rights  of  the  University. 

We  respectfully  submit  : 

1st.-  That  the  Regents  had  a  right  to  draw  on  the  1st  of  January 
and  1st  of  July,  1872,  and  on  the  1st  of  January,  1873,  the  semi 
annual  interest  that  accrued  at  those  respective  dates  on  the  Prin- 
cipal of  the  Seminary  or  University  Fund,  (so-called.)  See  last 
three  lines  of  Clause  First  of  section  20,  of  an  Act  entitled,  "  An  Act 
to  create  and  organize  the  University  of  California."  Approved, 
March  23d,  1868. 

• 

2d.  That  the  Regents  had  a  right  to  draw  on  the  1st  of  July,  1872, 
and  the  1st  of  January,  1873,  the  semi-annual  interest  that  accrued 
at  those  dates  on  the  Bonds  purchased  with  the  net  proceeds  of  the 
sale  of  Tide  Lands. 

See  5th,  6th,  and  7th  lines  of  section  4,  of  an  Act  entitled,  "An  Act 
for  the  Endowment  of  the  University  of  Califormia."  Approved 
April  2d,  1870. 

i 

3d.  The  Act  of  March  26th,  1872,  entitled  "An  Act  to  provide 
for  the  support  of  the  University  of  California,"  .did  not  expressly  or 


13 

impliedly  repeal  the  two  Acts  herein  before  set  forth,  nor  did  it  mpair 
any  rights  by  them  vested  in  the  Regents  of  the  University.  We  urge 
with  confidence  that  the  proper  course  to  pursue  in  the  premises  is 

this  : 

The  Regents  to  draw  from  the  University  Fund  all  the  income  that 
may  have  accrued  from  the  two  sources  of  Revenue,  first  above  men- 
tioned, and  then,  the  Secretary  as  required  by  the  Acts  of  March 
•26th,  1872,  embody  in  his  sworn  statement  to  the  Controller  of  State, 
the  receipts  from  this,  as  well  as  from  all  other  sources  of  income  dur- 
ing the  month. 

We  are  fully  satisfied  that  the  income  from  the  Seminary  and  from 
the  Tide  Land  Bond  Fund,  to  which  it  is  not  disputed  the  Regents 
have  a  right,  ought  to  pass  through  and  appear  upon  the  books  of  the 
Treasurer  of  the  University.  This  cannot  be  under  the  practise 
adopted  by  you. 

We  submit  further  that  your  ruling  does  an  injustice  to  the  Uni- 
versity in  this: 

The  Act  of  March  26,  1872,  is  so  couched  that  should  the  necessary 
expenses  of  the  University  exceed  $6,000,  the  excess  however  great 
cannot  be  collected  from  the  State  during  that  month,  neither  can  it  be 
carried  forward  as  a  charge  against  the  succeeding  month,  even  though 
there  may  be  ample  margin  within  the  $6,000  limit  in  said  succeed- 
ing month  out  of  which  to  pay  said  excess.  In  other  words  neither 
•iexcess  or  deficiency  can  be  carried  forward  from  one  month  to  another. 

In  like  manner,  should  "  the  receipt  from  all  sources  of  income," 
reported  in  the  sworn  statement  of  the  Secretary,  exceed  in  any  month 
the  sum  of  $6,000,  the  Regents  could  draw  nothing  from  the  General 
Fund,  during  that  month,  but  it  is  equally  clear  the  excess  should 
not  be  charged  against  them  for  the  succeeding  month.  Under  the 
practice  indicated  by  your  letter,  you  do  in  effect  charge  the  excess  of 
<>iu-  month  to  account  of  the  next,  until  the  total  amount  to  the  credit 
of  the  Regents  in  the  University  Fund  is  exhausted. 

Tn  conclusion,  we  do  respectfully,  but  most  eanrestly  beg  of  you  to 
reconsider  your  ruling  and  that  you  will  permit  the  Regents  to  draw, 
as  they  have  several  times  done  before,  the  amount  of  interest  that 
has  accrued  to  the  University  Fund,  since  the  date  of  their  last  col- 


14 

lection,  and  they,  in  turn  will  report  it,  among  their  sources  of  income, 
as  required  by  law.  We  have  commissioned  Mr.  Moulder,  the  Sec- 
retary of  the  Board,  to  present  this  letter  in  person  and  on  behalf  of 
the  Regents  of  the  University,  to  make  such  representations  to  your- 
self and  the  members  of  the  State  Board  of  Examiners,  as  will  con- 
vince you  of  the  justice  of  the  claim  of  the  University. 

We  are,  with  much  respect, 

WM.  C.  RALSTON, 

S.  F.  BUTTERWORTH, 

A.  S.  HALLADIE, 

J.  MORA  MOSS, 
A.  J.  BOWIE, 

Finance  Committee  of  the  Regents  of  the  University, 


15 

SAN  FRANCISCO,  October  10th,  1876. 

J.  WEST  MARTIN,  ESQ.,  OF  FINANCE  COMMITTEE,  REGENTS  OF  THE 
UNIVERSITY. 

DEAR  SIR: 

Referring  to  the  application  made  by  the  Board  of  Regents  in 
1873,  during  my  administration  as  Secretary,  for  the  sum  of  $16,800, 
accumulated  interest,  earned  by  the  University  Fund,  and  the  Uni- 
versity Endowment  Fund,  I  would  state  that  in  conformity  with  res- 
olution of  the  Regents,  a  requisition  was  made  on  the  Controller  of 
State  for  a  warrant  for  the  amount  in  favor  of  W.  C.  Ralston,  Treas- 
urer of  the  University.  The  requisition  or  claim  was  first  submitted 
to  the  State  Board  of  Examiners,  for  their  approval  and  endorsement. 
Although  they  had  approved  on  at  least  two  prior  occasions  claims  for 
Interest  on  the  University  Fund,  ( never  before  on  the  University 
ENDOWMENT  Fund)  they  declined  to  approve  this,  because  the  Con- 
troller (Green,)  announced  that  he  would  not  draw  the  warrant  for 
it.  Subsequently,  the  Finance  Committee  of  the  Regents  addressed  a 
communication  to  the  Controller,  strongly  urging  the  arguments  in  sup. 
port  of  the  claim.  These  arguments  satisfied  the  Board  of  Examiners 
of  its  justice  and  in  an  interview  between  the  Regents  and  Gov.  Booth, 
and  Drury  Melone,  Sec.  of  State,  and  ex-ofiicio'  members  of  the  Board 
of  Examiners,  these  gentlemen  expressed  their  willingness  to  audit 
the  claim,  but  averred  that  it  would  be  of  110  use  unless  the  Controller 
would  agree  to  draw  the  warrant.  This  he  persistently  refused  to  do, 
on  what  seemed  to  me,  the  most  flimsy  pretext,  and  there  the  mat- 
t<"-  ended.  It  was  impossible  for  me  to  escape  the  conviction  then, 
and  I  am  equally  positive  now,  that  the  amount  was  justly  due  the 

fnts.  If  it  was  due  then,  no  statute  of  limitations  bars  your 
ri.uht  to  collect  it  now. 

I  am,  very  truly  yours, 

ANDREW.  J.  MOULDER. 


STATEMENT 


—  OF   THE  — 


—  OF   THE  — 


LAND  DEP ARTIE 


—  OF   THE  — 


UNIVERSITY    OF    CALIFORNIA 
From  Sept.  1st,  1869,  to  Feb.  1st,  1878. 


LIBRA  R  Y 

UNIVERSITY  OF 

CALIFORNIA. 


= 


